Limiting Contract Breach Liability For Construction Cos.

Law360 (August 30, 2019, 3:22 PM EDT) -- A three-judge panel of the U.S. Court of Appeals for the Sixth Circuit recently affirmed a United States district court decision denying a tunnel-boring manufacturer insurance coverage under a commercial general liability policy for a $40 million construction claim on the basis that a breach of contract exclusion barred insurance coverage.[1]

Background

Maxum Indemnity Co. v. Robbins Co. involved an alleged defective tunnel boring machine that The Robbins Company manufactured, designed and rented to JCM Northlink LLC. JCM filed for arbitration against Robbins alleging in excess of $40 million in damages (primarily related to project delays) after the tunnel-boring machine stopped working....

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